Commentary: What 'union' needs: Upward mobility

Once the inevitably partisan cheers and jeers fade from the House chamber after tonight’s State of the Union speech, Washington will return to the thing it does best: Nothing.

Gridlock will set in on the verge of yet another manufactured fiscal crisis, demonstrating how out of touch the nation’s capital is with the country — and with reality itself.

America, like much of the globalized world, is in the throes of light-speed change. This change sweeps across demography, technology and society. It leaps national boundaries and international markets. It has elements good and bad. The European debt crisis affects the stock market here just as a new app designed today affects a small business across the country tomorrow.

What Washington should be working on is how to manage this sweeping change in the present and plan for a better future, instead of merely arguing about — let alone solving — fiscal problems, now decades in the making. In this country, a better future means ensuring change: namely upward mobility, the American dream and its social contract. It is in danger of being undone, and taking with it the wealth at home that fuels American power abroad.

But the first step toward fixing a problem is admitting one, and Washington has yet to acknowledge the generally disastrous results of the last two decades. The current state of affairs did not begin in 2008; it culminated then. The reckless deregulation, globalization and automation of the 1990s was followed by the reckless and expensive wars in the first decade of this century, until the bitter fruits arrived: economic and fiscal wreckage.

Since the New Deal and through the Cold War, upward mobility has been our social contract. But the combination of globalization, automation and deregulation has drained trillions of dollars from the working class first, and then the middle and upper middle classes. Until the late 1990s, the middle class, for example, steadily accumulated wealth. From the end of World War II until 1999, household median income steadily rose to more than $54,000.

Since then, it has steadily dropped — down to the same levels of 15 years ago. Over the same period, families depleted savings, the national savings rate dropped, and people turned instead to debt, which soared on easy terms.

They didn’t turn to debt out of greed. They did so out of necessity. So, the average American family’s net worth has now dropped 40 percent, even as the net worth of the richest Americans grew by 13 percent, to $1.7 trillion.

Members of the middle and even upper middle class now face the specter of poverty. There are more poor people in the suburbs than the cities. Their children, saddled with mountains of college debt, stand the chance of being worse off than their parents.

I followed six upper middle class people while researching a book; all battle unemployment, foreclosure and the gnawing anxiety of sliding into poverty.

The potentially good news is that America set all this change in motion, and we can still shape it.

In California, Silicon Valley is employing as many people as it did during the dot-com boom; Google needs its own airport. In Texas, IBM is putting cognitive computing — supercomputers that learn — to work in the economy even as, crosstown, Dell is going private to catch up.

In Florida, Orlando is swelling, even as job creation sputters in Miami. In New York, hundreds of thousands of young people stream into Manhattan in a startup boom.

But none of this will succeed without renewed upward mobility — and here, as it defends its billionaire donors and its tea party grassroots, is where the Republican Party is on the wrong side of history.

The Democratic Party has its own defects, and President Obama has talked big but governed small. Yet the Republicans are mistaken in arguing for austerity, which has failed in Europe, and by opposing a grand bargain — even if it’s not so grand, but at least restores predictability.

That would allow Washington to move on and get in step with fast-moving reality. Then it could manage a changing society, deal with the rise of China, grapple with climate change, ensure a more stable global system and a more just America committed to its own signature change: Upward mobility.

Richard Parker is president of Parker Research in Austin, Texas, and a contributor to The New York Times.

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More liberal babble. Perhaps the SMN is becoming an extension of the Huffington Post. The article identifies problems but not the root causes. Perhaps if the government would stop encouraging the dependency mindset of its citizens, people would have more desire to gain the upward mobility the US was known for. We now have a government that does not value its citizens (by even considering to give citizenship to millions of illegal aliens) or its currency (by deficit spending greater than a trillion dollars per year). I say the government is a main part of the problem and not the solution as this liberal columnist from Austin fantasizes.